september 2013 - state attorney

In the United States, the authority to regulatemedical professionals lies with the states. To prac-tice within a state, cliniciansmust obtain a licensefrom that state’s government. State statutes dic-tate standards for licensing and discipliningmed-ical professionals. They also list tasks clinicians areallowed to perform. One view is that state licens-ing of medical professionals assures quality.

In contrast, I argue here that licensure notonly fails to protect consumers from incompe-tent physicians, but, by raising barriers to entry,makes health care more expensive and less acces-sible. Institutional oversight and a sophisticatednetwork of private accrediting and certificationorganizations, all motivated by the need to pro-tect reputations and avoid legal liability, offerwhatever consumer protections exist today.

Consumers would benefit were states to elim-inate professional licensing inmedicine and leaveeducation, credentialing, and scope-of-practicedecisions entirely to the private sector and thecourts.

If eliminating licensing is politically infeasible,some preliminary stepsmight be generally accept-able. States could increase workforce mobility byrecognizing licenses issued by other states. Formid-level clinicians, eliminating education re-quirements beyond an initial degree would allowemployers and consumers to select the appropri-ate level of expertise. At the very least, state legisla-tors should be alert to the self-interest of medicalprofessional organizations thatmay lie behind thelicensing proposals brought to the legislature forapproval.

Medical LicensingAn Obstacle to Affordable, Quality Care

by Shirley Svorny

_____________________________________________________________________________________________________

Shirley Svorny is professor of economics and chair of the Department of Economics at California State University,Northridge, and an adjunct scholar at the Cato Institute.

Executive Summary

No. 621 September 17, 2008

355763_PA621_1stClass:PaMaster.qxd 9/5/2008 1:10 PM

��

PA Masthead.indd 1PA Masthead.indd 1PA Masthead.indd 1PA Masthead.indd 1PA Masthead.indd 1PA Masthead.indd 1PA Masthead.indd 1PA Masthead.indd 1PA Masthead.indd 1PA Masthead.indd 1PA Masthead.indd 1PA Masthead.indd 1PA Masthead.indd 1PA Masthead.indd 1PA Masthead.indd 1PA Masthead.indd 1PA Masthead.indd 1PA Masthead.indd 1PA Masthead.indd 1PA Masthead.indd 1 2/9/06 2:08:34 PM2/9/06 2:08:34 PM2/9/06 2:08:34 PM2/9/06 2:08:34 PM2/9/06 2:08:34 PM2/9/06 2:08:34 PM2/9/06 2:08:34 PM2/9/06 2:08:34 PM2/9/06 2:08:34 PM2/9/06 2:08:34 PM2/9/06 2:08:34 PM2/9/06 2:08:34 PM2/9/06 2:08:34 PM2/9/06 2:08:34 PM2/9/06 2:08:34 PM2/9/06 2:08:34 PM2/9/06 2:08:34 PM2/9/06 2:08:34 PM

Introduction

In the United States, the authority to regu-latemedicalprofessionals lieswiththestates.Topractice within a state, cliniciansmust obtain alicense from that state’s government. Statestatutes dictate standards for licensing and dis-ciplining medical professionals. They also listtasks clinicians are allowed to perform (called aclinician’s “scope of practice”). One view is thatstate licensing of medical professionals assuresquality. Another view is that licensing is ineffec-tive andmakes consumers worse off.

States first began to license physicians inthe early part of the 20th century. In effect,states handed the administration of physi-cian-licensing laws to state boards composedof physicians. Likewise, states vested over-sight of medical school accreditation in theAmerican Medical Association, which repre-sents the interests of physicians.

Many observers have suggested that licens-ing laws give physicians too much power.Leadingeconomists—includingNobelLaureateMilton Friedman and University of Chicagoprofessor Reuben Kessel—have argued thatstate licensing laws unnecessarily restrict thesupply of medical care.1 In his 1963 article onhealth economics in the American EconomicReview, Nobel Laureate Kenneth Arrow notedthat state licensing laws were needlessly restric-tive, requiring physicians to perform tasks thatcouldbeperformedably and less expensively byless-skilled professionals.2 From this point ofview, liberalizing state licensing laws couldmakehealth caremore available and less expen-sive without harming quality.

It took growing healthcare costs to moti-vate partial liberalization. Following the pas-sage of Medicare and Medicaid legislation inthe United States in 1965, the demand forphysician services increased dramatically. Tokeep costs down, politicians at the federal lev-el reduced entry barriers for foreign-trainedphysicians.3 In 1972, nearly 45 percent ofnewly licensed physicians in the UnitedStates were foreign-trained, up from approx-imately 20 percent in the 1960s.4

Slowly, the states followed by expandingthe scopes of practice of nonphysician clini-cians.Many states adopted laws to allownursepractitioners to practice independently and toprescribe controlled substances—tasks histori-cally reserved for physicians. The fact thatnonphysician clinicians could provide certaintypes of care for less money than physiciansled to the broader use of such mid-level pro-fessionals in all aspects of health care.

Organizations representing mid-level clini-cians—including nurse practitioners, physi-cian assistants, nurse midwives, physical ther-apists, podiatrists, and optometrists, amongmany others—continue to advocate broaderscopes of practice for their members, ostensi-bly to increase access to care. However, thesesame groups are less concerned about accessto care when it comes to the role of other clin-icians. And they are anxious to raise educationrequirements for new entrants to their profes-sions. Such requirements clearly reduce access.

An important question is whether suchdeterminations even belong in the politicalarena, where decisions are subject to intenselobbying by parties whose interests might notalign with those of consumers. Researchers atthe University of California, San Francisco,Center for the Health Professions observe,“Interest groupswith strong lobbies play a sig-nificant role in shaping [scope-of-practice] leg-islation.”5

Any group of mid-level clinicians that cansway legislators can get its scope of practiceexpanded or increase education require-ments for new entrants. Alternatively, a pow-erful physician lobby can block changes tothe scopes of practice of mid-level practition-ers that would impinge on its members’ turf.

In this paper, I argue that these determina-tions do not belong in the political arena.State oversight ofmedical licensing and scopeof practice has negative consequences for con-sumers. Consumers would benefit were statesto eliminate professional licensing in medi-cine and leave education, credentialing, andscope-of-practice decisions to the private sec-tor and the courts.

2

State licensinglaws require

physicians fortasks that couldbe performed by

less-skilledprofessionals.


The Importance ofMid-Level Clinicians

Nonphysician clinicians have made signifi-cant inroads in the practice of medicine,despite opposition fromtheAmericanMedicalAssociation and state medical associations. By2004, there were more than 240,000 advancedpractice nurses6 and 60,000 physician assis-tants7 working in the United States, comparedwith about 800,000 active physicians.8 Thesetwo professions did not exist prior to the1960s.9 Medicare andMedicaid, which togeth-er account for nearly half of all health carespending in the United States,10 routinelyreimburse nonphysician clinicians, includingphysical therapists, audiologists, optometrists,podiatrists, nurse anesthetists and many oth-ers, for a variety of tasks.

Today, 23 states permit nurse practition-ers to practice independent of physician over-sight or collaboration; the remaining statesdo not.11 Most states allow nurse practition-ers and physician assistants to prescribe con-trolled substances.12 Though no states allowphysician assistants to practice independent-ly, it is not uncommon for physician assis-tants to have relative autonomy, conferringwith a supervising physician as necessary.

Specialization is increasingly commonamong mid-level clinicians. For example,nurse practitioners training at the Universityof California, San Francisco, may choosefrom a wide variety of specialties, as listedbelow: 13

• Acute Care• Midwifery/Women’s Health• Acute Care Pediatrics• Occupational and Environmental Health• Adult Nursing• Oncology• Cardiovascular• Pediatrics• Advanced Community Health• Neonatology• Critical Care/Trauma• Perinatology• Family Practice

• Psychiatric/Mental Health• Gerontology

In addition to nurse practitioners, ad-vanced practice nurses include clinical nursespecialists, certified nurse midwives, andnurse anesthetists.

Despite the primary care emphasis in theireducation,many physician assistants work inspecialty practices. TheAmericanAcademyofPhysician Assistants lists numerous specialtypractices, as follows. None of these specialtiesare specifically licensed by the states.14

• Allergy and Immunology Medicine• Oncology• Cardiology• Otolaryngology• Dermatology• Orthopedic Surgery• Emergency Medicine• Psychiatry• Gastroenterology and Hepatology• Radiology• Nephrology• Rheumatology• Neurosurgery• Pediatrics• Obstetrics and Gynecology• Surgery• Occupational Medicine

Mid-Level Clinicians and QualityBy almost all accounts, the quality of ser-

vices consumers get from nonphysician clini-cians is at least on par with what they wouldget from a physician performing the same ser-vices. Dozens of peer-reviewed studies com-pareoutcomes in situationswherepatients aretreated by a physician, a physician assistant, oran advanced practice nurse. Outcomes appearsimilar15—an important factor, consideringthatnonphysician clinicians canprovidemanyservices at amuch lower cost. There is also evi-dence that teams of clinicians outperformindividual physicians. (Many physicians whoare accustomed toworking in teams arehappywith the collaboration.)16

A review of more than 50 studies by the

3

Bymostaccounts,the quality ofservicesconsumers getfrom nonphysi-cian clinicians isat least on parwith what theywould get froma physician.


American Medical Association’s Council onMedical Education found that the peer-reviewed studies “almost uniformly concludethat . . . anon-physician clinician . . . canprovidean acceptable level of care.”17 The Council didnote that some observers find serious flaws inthe literature, including small samples, lack ofcontrol subjects, and failure to control for dif-ferences in the severity of illness treated byphysicians and nonphysician clinicians. Never-theless, physician groups are unable to point tostudies showing worse health outcomes withmid-level clinicians. That may be themost per-suasive evidence that the quality of care provid-ed by nonphysician clinicians is on a par withthat provided by physicians.

The Need forWorkforce FlexibilityThe flexibility toemploymid-level clinicians

innewways is an essential part ofmakingmed-ical care more affordable. As Harvard BusinessSchool professor Clay Christensen and his col-leagues explain, “Many of the most powerfulinnovations thatdisruptedother industriesdidso by enabling a larger population of less-skilled people to do in amore convenient, less-expensive setting things that historically couldbe performed only by expensive specialists incentralized, inconvenient locations.”18

Such disruption is already taking place inmedicine.Accordingtopublichealthresearcherand American Thoracic Society executive direc-tor StephenCrane, “Fifty years ago . . .medicinewas asmuchanart as a science.We’ve been abletocodifya lotof thatknowledge.Thatallowsusto teach what’s going on in a shorter period oftime and to delegate that to others to per-form.”19

Hospitals and other providers use whatworkforce flexibility exists to determine thetasks a particularmid-level clinicianmay per-form.20 As their skills develop, mid-level clin-icians are given greater responsibility andautonomy. Thus the effective delineation oftheir scopes of practice occurs outside thelicensing process, and largely at the point ofcare. Tracy Klein, a clinical instructor ofmed-icine at the Oregon Health and SciencesUniversity, writes, “Experience and environ-

ment can and will stretch the [nurse practi-tioner’s] knowledge and competence beyondthat of the basic education level.”21

The Indian Health Service (the federalhealth program for American Indians andAlaska Natives) grants clinical and prescribingprivileges to physician assistants on the basis ofeducation, training, experience, and currentcompetence.22 Relatively flexible scopes of prac-tice enable physician assistants to alleviateworkforce shortages as they emerge. Accordingto the American Academy of Physician Assist-ants, about20percentofPAschange jobsannu-ally, oftenmoving across specialties.23

Despite the progress made in incorporat-ing mid-level clinicians, licensing and scope-of-practice rules still restrict providers’ abilityto employ medical professionals to their fullcompetence. Licensing restricts nurse practi-tioners and other mid-level clinicians whosecompetence exceeds the legislatively imposedscope of practice.

The Politics ofMedical Licensing

Groups representing mid-level profes-sionals are currently threatening to erodewhat little workforce flexibility exists. Likephysicians in the early part of the 20th cen-tury, lobbying groups of mid-level cliniciansare working to secure legislation that wouldallow them to stake a claim to specific areasof practice, excluding all others from provid-ing services in those areas. In addition, manyclinician groups are lobbying to increase edu-cation requirements for new entrants to theirfield. When government issues licenses tomedical professionals, it creates a regulatoryapparatus that organized clinicians canmanipulate to increase their incomes.

Is More Education Always Better?Mid-level medical professions have been

successful in increasing the amount of educa-tion required to obtain a license. For example,states increasingly require newNPs to obtain amaster’s degree. All states require physical ther-

4

Licensingrestricts nurse

practitioners andother mid-levelclinicians whose

competenceexceeds thelegislatively

imposed scopeof practice.


apists to have a master’s degree.24 The Ameri-can Association of Colleges of Nursing wantsstates to require a Doctor of Nursing Practicedegree of all new advance practice nurses by2015.25 A new law requires physician assistantstohaveamastersorhigherdegree topractice inOhio.26 Every state has required a master’sdegree of occupational therapists since 2007.27

Starting in 2012, Californiawill require newaudiologists to have obtained a doctorate(Au.D.), raising concerns that the legislationwould exacerbate a shortage of audiologists.The legislation followed a move by the Ameri-can Speech-Language-Hearing Association, theorganization that accredits college audiologyprograms, to require adoctorate forprofession-al certification. Questioning both why Califor-nia legislators rushed to comply and whethereven amaster’s degree is necessary to test some-one’s hearing, the Sacramento Bee called therequirement for a doctorate an “extraordinaryand costlymandate.”28

Ostensibly, increasing education require-mentswould improvequality. But the relation-ship between educational inputs and betterhealth outcomes is not that straightforward.Stricter education requirements limit entryinto the medical professions, increase prices,and reduce access to care, which can result inworse health outcomes.

As with the audiology legislation inCalifornia, it is not clear that those excludedby these higher barriers to entry would not becompetent practitioners.Whenhiring, hospi-tals and other employers can and do specifythe level of education or training required ofclinicians. Not every job requires the samelevel of skills. Increasingly strict educationrequirements deprive health care providers ofa range of education and training optionsfrom which to choose. Forcing providers touse more highly educated—and thus morecostly—practitioners increases prices and lim-its access to care.

Scope-of-Practice Turf WarsDebates among competing groups of clin-

icians over scopes of practice are increasinglycommon. In July 2003, the Federation of

State Medical Boards established a SpecialCommittee on Scope of Practice noting that“scope-of-practice changes are among themost highly charged policy issues facing statelegislators and health care regulators.”29

The American Medical Association hasjoined with other physician organizations(including state-level medical associations) toestablish the Scope of Practice Partnership, an“organizedmedicine coalition” tomonitor leg-islative efforts by other associations of healthprofessionals.30 The president of the AmericanMedical Association, Ronald M. Davis, calledthe Scope of Practice Partnership a “watchdogof legislative, regulatory, and legal endeavorsthat seek to expand the scope of practice ofnon-physician providers into the practice ofmedicine.”31

To counter efforts by organized medicineand the AMA’s Scope of Practice Partnershipin particular, a group of 34 organizations rep-resenting other licensedmedical professionalsformed the Coalition for Patients’ Rights.32

Acknowledging the difficulties in reviewingscope-of-practice proposals and determiningappropriate scopes of practice for various pro-fessionals, several stateshaveestablished legisla-tive committees to study scope-of-practice pro-posals andmake recommendations. Statutes inArizona and Iowa address the scope-of-practicereview process. Arizona’s statute requires con-siderationof the reason increasedscopeofprac-tice is sought, the impact on consumers’ accessto health care, and implications for the inter-statemigrationofhealthcareprofessionals.33 InVirginia, the Board of Health Professions (withmembers fromeachof the 13health regulatoryboards in the state) evaluates regulatory pro-posalsandrecommendstheappropriate levelofregulation.34 A Texas proposal (HB 3950) toestablish aHealthProfessions Scopeof PracticeReviewCommission failed in 2007.

In most cases, physicians (represented bythe state medical association) are in one cor-ner and organizations representing otherclinicians are in the other.35 But non-physi-cian clinicians also step on each other’s toes.For example, because of a strong nursing lob-by that opposed the practice of physician

5

Stricter educationrequirementslimit entry intothe medicalprofessions,increase prices,and reduce accessto care, which canresult in worsehealth outcomes.


assistants, Mississippi was the last state toallow physician assistants to practice.36

Those groups that oppose broader scopefor nonphysician clinicians call for extensivereviewbypolicymakersof scope-of-practice ini-tiatives. For example, the guidelines set by theFederation of State Medical Boards calls for a“verifiable need” for the proposed change,along with a review of the “details, rationale,andethicsofanyproposals tobypass licensing”and “the implications for other practitioners,and the effect on patient safety.”37 That stan-dard would present a formidable barrier toreform. It is noteworthy that the Federation’sdesire for evidence runs in only one direction.The Federation only demands evidence of thepatient-safety effects of proposed expansions ofscope-of-practice rules. It does not call for evi-dence that the existing limits on midlevel clini-cians’ scopes of practice enhancepatient safety.There is no such evidence.

Today’s turf battles include a wide rangeof issues. Here are some examples:

• Optometrists seek to expand their scopeof practice to include surgical proce-dures traditionally limited to ophthal-mologists.38

• Physical therapists want to be able totreat patients without a physician’s pri-or diagnosis.39

• Physician-anesthesiologists seek to limitthe scope of practice of nurse anes-thetists.40

• The American Medical Association op-poses assessment anddiagnosis of clinicaland laboratory data by PhD clinical labscientists.41

• Medical societies in California andIdaho amended naturopaths’ scope ofpractice to require physician supervi-sion or collaboration.42

• In Missouri, certified professional mid-wives aspire to work independent ofphysician collaboration.43

• Despite physicians’ concerns about safe-ty, California decided to expand thescope of practice for oral and maxillofa-cial surgeons to include elective facelifts,

rhinoplasties, and eyelifts.44

Clinician groups that fail to achieve theirgoals through legislative means have found asecond avenue to reform: working with stateregulatory boards to alter scope-of-practicerules. Because it is expensive for physiciangroups to challenge board decisions in court,this path to scope-of-practice expansion isgrowing.45 However, it is not always successful.In 2008 a Texas appeals court ruled that theTexas State Board of Podiatric Medical Exam-iners went beyond its power in 2001 when itexpanded podiatrists’ scope of practice. Theappeals court determined that such a changewouldneedtocomefromthestate legislature.46

With all of these efforts, the concern forconsumers is that licensing requirements andscope-of-practice determinations will reflectthe political power of various clinician lobbiesrather than the patient’s interest in affordable,quality care. For example, physician assistantsnowhaveprescribing authority over controlleddrugs in 36 states, yet Alabama, Florida,Kentucky, and Missouri still do not allowphysician assistants toprescribe any controlledsubstances.47 As of 2001 physician assistantsand nurse practitioners had parallel duties inmany facilities in Louisiana, yet nurse practi-tioners were allowed to write prescriptions,whereas physician assistants were not.48 Suchoutcomes are more likely the result of powerpolitics than variation in the competence ofphysician assistants across states.

Licensing and scope-of-practice laws givethe medical professions considerable controlover whether other professions may competewith them. That frequently slows the spreadof affordable care. Consumers are worse off iflicensure and scope of practice laws unneces-sarily limit access to care.

What Value DoesLicensing Add?

State licensing boards’ duties includechecking the credentials of medical profes-sionals, disciplining errant practitioners, and

6

Licensing andscope-of-practice

laws givethe medical

professions con-siderable control

over whetherother professions

may competewith them.


reporting their activities to the public. Yet, aswill be explained in detail below, boards relyon private organizations for much of theircredentialing activity, disciplinary efforts arelargely ineffective, and consumers receive lit-tle information from licensing boards thathelps them choose quality clinicians. It islegitimate to ask, what value does licensingadd?

Checking CredentialsState boards establish education and train-

ing criteria (including post-graduate training)and require potential licensees to pass exami-nations to test their knowledgeandskills. Stateboards also fingerprint applicants, checkingcriminal records with the Department ofJustice and theFederalBureauof Investigation.Credential verification andbackground checksaccount for a sizable share of state medicalboard spending.49

State medical boards don’t do all the workthemselves. They rely heavily on private organi-zations that accredit education and trainingprograms and credential individual clinicians.For example, unique state tests for physicianshave given way to common national test, theUnited States Medical Licensing Examination(designed and administered by two indepen-dent, private organizations: the Federation ofStateMedicalBoardsandtheNationalBoardofMedical Examiners). To assess physician train-ing, all states rely on the American MedicalAssociation’s accreditation of U.S. medicalschools.

Likewise, statesdependontheAccreditationReview Commission on Education for thePhysicianAssistant to assess training programsfor physician assistants and on the NationalBoard for Certification of OccupationalTherapists’ examination to assess the skills ofoccupational therapists.Manystates relyontheAmerican Nurses Credentialing Center, whichcredentials individuals across 26 categories ofnurses and nurse practitioners (advanced prac-ticenurses).50 These are just a fewof theoutsideorganizations on which states rely. In theabsence of licensing laws, these organizationswould continue to provide valuable credential-

ing services.

Disciplining Poor Performers?Discipline is the secondtaskof statemedical

boards and takes upmost of the time of boardstaff. Disciplinary efforts generally focus onresolvingcomplaints filedby thegeneralpublic.When state board members and managers ofstate boarddisciplinary effortswere surveyed in2004–2005, however, they expressed the con-cern thatpublic complaintsarenotagood indi-cator of serious problems with practitioners.51

Thosesurveyed felt thatphysicians,nurses,hos-pitals, andotherproviderswouldprovidebetterleads. Yet medical professionals tend to under-report quality problems. According to one sur-vey: “Forty-five percent of [physicians] withdirect personal knowledge of a physician intheir hospital group or practice who wasimpaired or incompetent did not always reportthat physician. Of those with direct personalknowledgeofaseriousmedicalerror,46percentdid not report that error to authorities on atleast 1 occasion.”52 Moreover, those who didreport problem colleagues did not necessarilyreport them to a state medical board. Thusthere are potentiallymany serious quality prob-lems that licensing cannot even identify, muchless remedy. Indeed, statemedical boards “typi-cally do not define prevention of injury as partof their responsibility.”53

A second problem confronting stateboards is that it is very difficult and expensiveto establish substandard care, incompetence,or negligence.54 Expert witnesses and lawyersare expensive. State boards don’t have suffi-cient time or money to investigate the largenumber ofmalpractice settlements and judg-ments.55

As a result, state boards have a poor recordof disciplining errant physicians. A study ofFlorida physicians with malpractice payoutsover $1 million found that only 16 percenthad been sanctioned by the state medicalboard.56 Among physicians who made 10 ormore malpractice payments between 1990and 2005, only one-third were disciplined bytheir state boards.57

Further complicating the disciplinary

7

State boards havea poor record ofdiscipliningerrant physicians.


process, state boards are reluctant to pull alicense ormake public the results of an inves-tigation due to the financial consequencesfor the sanctioned professional. Just issuingformal charges against a physician, whichbecome public record, affect a doctor’s repu-tation and potential income.58

Asa resultof these forces, formaldisciplinaryactions typically do not focus on improper ornegligent care. Instead, the bulk of disciplinaryactions involve inappropriate prescription ofcontrolled substances, drug and alcohol abuse,mental illness, sexual improprieties and otherissues.59 Researchers have found a high rate ofrepeat offenders among physicians sanctionedby state medical boards, suggesting that licens-ing does not deal with offenders in an effectiveway.60

Reporting Negative Outcomes to thePublic?

The licensing system also comes up shortin the area of reporting substandard care tothe public. There are often long delays.California reports an average of 934 days ingetting a case to judicial review.61 To avoid thehigh costs of lengthy hearings, boards rou-tinely negotiate voluntary settlements for less-er offenses. In the Federation of StateMedicalBoards’ database, the nature of the investiga-tion isnot recorded inmore than65percentofcases that ended in sanctions between 1994and 2002. In those cases, the state board andthe physician entered an agreement withoutthe physician being found guilty.62 Thesedynamics deny consumers information thatwouldhelp themavoid low-quality physicians.

Licensing, then, does little to prevent clin-icians from rendering improper or negligentmedical care. Disciplinary actions are not pri-marily related to the quality of medical careper se, andmany disciplinary actions are keptbelow the public radar. If, as some suggest,concerns about financial and reputationalconsequences diminish efforts to disciplineclinicians formally or publicly, or encourageconfidential consent agreements, then onemight conclude that licensure offers moreprotection to malfeasant clinicians than to

consumers.

Consumer ProtectionsOffered by theMarket

and the CourtsA closer look suggests that most patient

protections are unrelated to state licensing.63

Concern over reputation and potential liabili-ty for medical malpractice creates incentivesfor private efforts to assess clinician knowl-edge, skills and competence that well exceedthose associated with state licensing. Indeed,health careproviders regularly review informa-tion on their clinicians that is broader andmore up-to-date than information associatedwith licensure. At the point of care, hospitalsand other institutions dictate what serviceseach individual clinician may provide. On topof that, the structure of medical malpracticeliability insurance rates creates some incen-tives for providers to avoid medical errors andother negligent care.

Medical Malpractice LiabilityHospitals, health maintenance organiza-

tions, and other healthcare providers may beliable for negligence in the credentialing, selec-tion, retention, and supervision of health pro-fessionals.64 Courts have established that ahospital or health maintenance organizationhas a “non-delegable duty to select and retainonly competent physicians [and] to oversee allpersons who practice medicine” in its facilityor system.65 The courts have ruled that health-care organizations have a duty of proper selec-tion and a duty to supervise clinicians.66

Therefore, hospitals and other health careproviders are legally liable for the actions ofclinicians whose background and skills theyhave assessed. When a negligent clinician isemployed by a health care organization, thecourts may hold the employer liable.67 Even ifthe clinician is not employed by the provider,the provider may still be liable if there is anyreason for patients to think that clinicians aretied to a provider, such as when a hospitaladvertises thequality of its clinicians. Similarly,

8

Onemightconclude that

licensure offersmore protectionto malfeasantclinicians thanto consumers.


managed care organizations may be liable forthe actions of plan physicians.68

Malpractice InsurersPrivate malpractice insurers also protect

consumers by providing guidance and incen-tives for hospitals, other facilities, and individ-ual clinicians to improve the quality of care.Most insurance companies offer discounts tophysicians or physician groups willing toengage in practices known to reduce medicalerrors. For example, Medical Liability MutualInsurance Company offers a premium dis-count of 5 percent to physicians and surgeonswho complete a qualified risk-managementprogram.69

Physicianswithhighclaims experiencemayface premium surcharges (called “experiencerating”) or may have to turn to surplus-linecarriers, which impose high premiums, havelarge deductibles, and may restrict practice orrequire additional training or supervision.70 A1985 survey of physician-owned insurancecompanies (which cover about 60 percent ofthemarket formalpractice insurance)71 foundthat these insurers penalize physicians whoexhibit “negligence-prone behavior.” During aone-year period, 0.66 percent of physicianshad their insurance pulled. Insurers restrictedcoverage for or sanctioned another .7 percentof policyholders, and another 1.8 percentfaced premium surcharges or deductibles ifthey wanted to continue to be insured. Thesurvey’s authors concluded that “the physi-cian-owned companies are effective agents inidentifying negligence-prone behavior . . . andplay an important role in deterring substan-dard performance.”72 A study of malpracticepremiums in Vermont found surcharges ashigh as 400 percent,73 and all insurers report-ed having declined or refused to renew cover-age for reasons that include a history ofadverse claims.74 A look at one Californiamal-practice insurer’s rate filing shows the range offactors the insurer considers. Among otherthings, insurers impose surcharges for failedboard examinations, lack of specialty boardcertification, lack of hospital privileges, andfrequent malpractice claims.75 These financial

penalties discourage negligent care and helpdrive out of business physicianswho repeated-ly put patients at risk.

Hospitals need to be concerned aboutmal-practice liability as well. Like physician-ownedmalpractice insurance companies, hospitalsare in a prime position to monitor and evalu-ate clinicians. Hospitals generally self-insure,so they bear the costs of malpractice directly,creating incentives to be selective about med-ical professionals they hire and incentives tomonitor clinicians over time. When hospitalsbuy insurance, it is “highly experience rated,”76

thus a history of claims will cause their premi-ums to rise.

Private CredentialingAs noted above, many services provided by

state licensing boards are redundant to effortstaken at the point of care. Hospitals and otherinstitutions don’t give clinicians free reign justbecause the clinician has a state license. A vicepresident of theTexas State Board of PodiatricMedical Examiners recently noted that theboard is “only a licensing agency . . . We’re nota credentialing agency . . . It’s up to the hospitals todecide who they’ll credential—and for what.”77

Hospitals, managed-care organizations,and other providers not only check the back-ground of medical professionals to avoid lia-bility for negligence but also to meet stan-dards set by accrediting organizations andinsurers. In addition, federal law requireshospitals to request information from theNational Practitioner Data Bank at the timea health care practitioner applies for a posi-tion and then every two years. Among otherthings, the National Practitioner Data Bankincludes entries on medical malpractice pay-ments and whether a clinician has beendenied privileges to practice in a hospital orother health care facility.78

Hospitals and other facilities are accreditedby the independent Joint Commission,79

whose clinician credentialing standards aresufficiently extensive tomeet federalMedicareand Medicaid requirements. Clinicians areasked for indentifying information and a dec-laration of adverse legal actions and convic-

9

Most patientprotections areunrelated to statelicensing.


tions.80 Every organization accredited by theJoint Commission must meet standard HR1.20, which requires a process in place “toensure that a person’s qualifications are con-sistent with his or her job responsibilities.”81

Therefore, every hospital or other healthcarefacility has policies and procedures that delin-eate each clinician’s scope of practice. Thesecan be generic for groups of clinicians or writ-ten specifically for individual clinicians. Thehospital medical staff observes and docu-ments a clinician’s skills before approving theclinician as competent to practice. Cliniciansare supervised both concurrently and retro-spectively as the basis for granting hospitalprivileges.

Managed care organizations, preferredprovider organizations, andotherhealthplansare accredited by the National Committee forQuality Assurance. The NCQA requires theseorganizations to credential clinicians as well.82

The demand for clinician-credentialinghasgrown to the point that a sophisticated indus-try now collects and verifies informationabout individual clinicians for hospitals andother clients. Credentials verification organi-zations (CVOs) verify clinicians’ training andexperience, and periodically review claims andadverse judgments against health care profes-sionals. In addition to verifying a clinicians’professional education and training, CVOsverify whether a clinician has been certified toprescribe controlled substances by the federalDrug Enforcement Agency, the clinician’smalpractice claims history, any Medicare orMedicaid sanctions, and the clinician’s workhistory. CVOs also monitor private actionsagainst medical professionals, including lossof hospital privileges or other sanctions. Toguide facilities and organizations in choosinga CVO, the NCQA—the same group thataccredits managed care, health maintenanceand preferred provider organizations—certi-fies independent CVOs.83

The private, nonprofit Federation of StateMedical Boards’ Credentials VerificationService offers a permanent repository forrecords for physicians andphysician assistants:

Applicants who complete the verifica-tion process establish a permanent,lifetime portfolio of primary sourceverified credentials [that] can be usedthroughout the applicant’s career forstate licensure, hospital privileges,employment, and professional mem-berships.84

Private specialty board certification isanother voluntary form of credentialing andquality certification more rigorous than statelicensing. Private specialty boards administerexams to test physicians’ competence in a par-ticular area of medicine; physicians maybecome board-certified in more than one spe-cialty. According to the American Board ofMedical Specialties, nearly 85 percent of U.S.physicians are independently certified by spe-cialty boards.85 In 2002, the 24 boards that aremembers of the American Board of MedicalSpecialties agreed to adopt common “Main-tenance ofCertification” standards. All boardsare required to be in compliance by 2010. Thisnew agreement not only requires a formalexamination and an assessment of clinicalskills in a supervised practice setting, but alsoperiodic reevaluation.86

In theUnitedStates and abroad (in the bur-geoning medical tourism industry), board cer-tification guides hospitals and health plans inassessing physicians and is recognized by con-sumers as an indicator of quality. Physiciansoften advertise their specialty-board certifica-tions, andpatients often search forboard-certi-fied physicians. The value of independentboard certification is suggested by a nationalstudy that found that managed care organiza-tions are more likely to contract with board-certified physicians thanwith non-board-certi-fied physicians.87

Nongovernmentalorganizationsalsocertifythe quality of nonphysician clinicians. As notedabove, the independent National CommissiononCertificationofPhysicianAssistants certifiesphysician assistants. Anotherprivate group, theAccreditation Review Commission on Edu-cation for the Physician Assistant, accreditsphysicianassistantprograms.Manynurseprac-

10

Nearly 85 percentof U.S. physiciansare independently

certified byspecialty boards.


titioners seek certification from the AmericanNurses CredentialingCenter. The ANCCoffersnursing certification in 26 different specialties.According to that organization, more than75,000 advanced practice nurses are currentlycertified.88 Other organizations that certifynurse practitioners include the National Cer-tification Board of Pediatric Nurse Practition-ers and Nurses, the National CertificationCorporationfor theObstetric,GynecologicandNeonatal Nursing Specialties, the AmericanAcademy of Nurse Practitioners, and theNational Association of Nurse Practitioners inWomen’s Health.89 These organizations areknown in themedical community and serve asa guide in hiring nurses.

If state licensing were eliminated tomor-row, consumers would continue to be pro-tected by this sophisticated network of well-known private organizations that accredithealth care facilities and credential medicalprofessionals.

Brand Names: Would AdditionalProtections Arise without Licensing?

In many industries, markets assure qualitythrough brand names and reputation.90 Con-sumers rely on brand names as a quality signalin markets for restaurants, clothing, automo-biles, computers, and air travel. Thanks tobrandnames, a hungry traveler in a strange cityknowsexactly thequalityof cuisinehewill get ifhewalks into aMcDonald’s versus aChili’s or aP.F. Chang’s China Bistro.

Brand names have played a smaller role inhealth care than in other industries, perhapsbecause of preemption by licensing boardsand the perception of quality assurance asso-ciated with licensure. However, brand nameand reputation are growing as a basis for qual-ity assurance in health care markets. Healthplans that combine insurance and health caredelivery under one roof, such as KaiserPermanente, stake their reputations on thequality of their providers. The ClevelandClinic, the Mayo Clinic, and other facilitieshave national reputations and are puttingthem to use in telemedicine.91 Brand-nameretail clinics, such as RediClinic and Minute

Clinic, offer first-linehealth care, are staffedbynurse practitioners, and are opening up inCVS, Target, and Wal-Mart stores across theUnited States. These organizations have enor-mous incentives tomaintainquality toprotecttheir reputations. For example, Minute Clinicboasts of its adherence to evidence-basedmed-icine guidelines.92 Wal-Mart has bet on brandnames as a proxy for quality in promoting itsretail clinics. “The Clinic at Wal-Mart” brandwill partner with local hospitals in “co-brand-ed” walk-in clinics, relying on local hospitals’reputations to bring in consumers.93 Withoutstate licensing, brand names and reputationwould play an even greater role in health caremarkets, such as by offering guidance topatients considering treatment in freestand-ing outpatient surgery centers.

Conclusion

Medical licensure fails to meet expecta-tions in the area of discipline and consumerprotection. Statemedical boards’ disciplinaryefforts can arguably be said to protect clini-cians more than consumers. Many actionsagainst clinicians are settled privately andafter extended periods of time. Clinicianswho have faced disciplinary actions oftencontinue to practice, with no public disclo-sure of the reasons for the sanction. The per-sistent difference between the promise oflicensing and its actual performance is sum-marized by one long-time observer of NewYork’s licensing laws, who describes thatstate’s statutory authority as “exemplary” butthe state’s use of that authority “shameful.”94

Reforms that fail to appreciate thepropensity of licensing authorities to placephysician protection ahead of patient protec-tion seem destined to repeat the failures oflicensing. Drs. Lucian Leape and JohnFromson call for sweeping changes to exist-ing quality assurance measures, including“explicit [national] performance standards ofbehavior and competence” for physicians.While those standards would be based, as ithappens, on the voluntary Maintenance of

11

If state licensingwere eliminatedtomorrow,consumers wouldcontinue to beprotected.


Certification standards developed by the pri-vate American Board of Medical Specialties,Leape and Fromson propose that reform beinitiated and ultimately enforced by statemedical boards.95 Little in the state boards’decades-long record of failing to protect con-sumers suggests that state boards are well-suited to this task.

Those who favor replacing state regula-tions with national standards argue thatnational standards would encourage geo-graphic mobility of medical professionals. Yetnational standards for medical professionallicensing would be a mistake for two reasons.First, variations across states let us see whatworks and what doesn’t, allowing for innova-tion. Second, a shift toward national stan-dards would increase special interest influenceover licensing, leading to greater entry restric-tions and less access. Eliminating licensureentirely would increase mobility as well, andwould be a better policy option.

Quality assurance in today’s medical mar-ketplace doesn’t come from state medicalboards but from the fear of medical malprac-tice liability and from market mechanismssuch as malpractice insurers; independent cer-tification agencies like the Joint Commission,specialty boards, and credentials verificationorganizations; consumer guides such asConsumer Reports, HealthGrades, and Angie’sList; and insurers’ and providers’ interest inprotecting their reputations and brand names.A clinician may have a degree from an eliteschool, but if he has not kept abreast of themedical literature or his skills have deteriorat-ed,his state licensedoesalmostnothing topro-tect patients. According to Dr. Derek vanAmerongen,ChiefMedicalOfficer ofHumanaHealthPlansofOhio and Indiana: “People andthe legislatures read way toomuch into licens-es. They are extremely poor proxies for qualityand knowledge.”96 Oversight of medical pro-fessionals by state medical boards is at bestredundant to those quality protections provid-ed by courts and market processes. Becauselicensing reduces access to care and may giveconsumers a false sense of security, it may infact domore harm than good.

If there were no state licensing of medicalprofessionals, consumers would searchmoreand demand more information, as they dowith other goods. Patients could obtain asmuch quality assurance as licensure pro-vides—and more—simply by looking for aboard-certified physician. Brand nameswould play an increasing role in assuringquality care.

Additional protections likely would arisebeyond the consumer’s immediate purview.Credentials verification organizations wouldcheck criminal records and verify clinicians’education, training, and performance onnational exams.97 The specific informationprovided by licensure is not difficult to verifyprivately. Competition among credentialsverification organizations would place suchinformation, and potentially more, in thehands of providers and consumers. As notedabove, the specialty boards already have plansto increase their monitoring of the continu-ing competence of board-certified physicians.When patients are injured by incompetent ornegligent physicians—as some inevitably willbe—they will continue to have recourse to thecourts. The potential for liability, concernover reputation and brand name, and evolv-ing standards of care would put continuouspressure on health plans, facilities, and clini-cians to improve quality.

Without legislatively mandated educationrequirements or scope-of-practice restrictions,hospitals and other providers could betteradjust their workforces when demand shifts,or when opportunities arise to reduce costs—either by making care more convenient or bysaving patients money—while maintainingquality. Patients have little to lose, but muchto gain, from eliminatingmedical licensing.

If eliminating licensing is politically infeasi-ble, somepreliminary stepsmight be generallyacceptable. States could immediately increaseworkforce mobility by recognizing clinicianlicenses issued by other states, or Congresscould require states to do so. Formidlevel clin-icians, such as physician assistants, physicaltherapists, and audiologists, eliminating edu-cation requirements beyond an initial degree

12

Patients havelittle to lose, butmuch to gain,

from eliminatingmedical licensing.


(say a bachelors’ degree) would let employersand consumers select the appropriate level ofexpertise. At the very least, state legislatorsshould be alert to the self-interest of medicalprofessional organizations thatmay lie behindthe licensing proposals brought to the legisla-ture for approval. When physician groupsinsist that changes in scope of practice be con-tingent upon evidence of improved outcomes,politicians should remember that, at present,there is nobasis for the claim that patient safe-ty is assured under the current system (an arti-ficial construct ofpast legislative action)or theclaim that patients are at greater risk whenstate regulation is relaxed.

Notes1. Milton Friedman, Capitalism and Freedom(Chicago: University of Chicago Press, 1962);ReubenKessel, “PriceDiscrimination inMedicine,”JournalofLawandEconomics1 (1958): 20–53;ReubenKessel, “The A.M.A. and the Supply of Physicians,”Law and Contemporary Problems 35 (1970): 267–83.See also Shirley Svorny, “Licensing Doctors: DoEconomists Agree?” Econ Journal Watch 1 (2004):279–305. For an empirical test suggesting thatphysiciansbenefited at the expenseof consumers inthe 1960s, see Shirley Svorny, “Physician Licensure:A New Approach to Examining the Role ofProfessional Interests,” Economic Inquiry 25 (1987):497–509.

2. Kenneth J. Arrow, “Uncertainty and theWelfareEconomics of Medical Care,” American EconomicReview 53 (1963): 941–73, 957.

3. Shirley Svorny, “Foreign-Trained Physiciansand Health Care in the United States,” (Ph.D.Diss., University of California, Los Angeles, 1979);Shirley Svorny, “Consumer Gains from PhysicianImmigration to the U.S.: 1966–1971,” AppliedEconomics 23 (1991): 331–38.

4. L. J. Goodman, PhysicianDistribution andMedicalLicensure in the US, 1976 (Chicago: Center forHealth Services Research and Development,American Medical Association, 1977).

5. Catherine Dower, Sharon Christian, and Ed-ward O’Neil, “Promising Scopes of PracticeModels for Health Professions,” Center for theHealth Professions, University of California, SanFrancisco, 2007, p. 10, http://futurehealth.ucsf.edu/pdf_files/Scope%20Models%20Fall%202007.pdf.

6. Health Resources and Services Admnistration,“TheRegisteredNurse Population: Findings fromthe March 2004 National Sample Survey ofRegistered Nurses,” ftp://ftp.hrsa.gov/bhpr/workforce/0306rnss.pdf.

7. American Academy of Physician Assistants,“2004 Physician Assistant Census Report,” http://www.aapa.org/research/04census-intro.html.

8. U.S. Census Bureau, “2008 U.S. StatisticalAbstract,” Table 154, http://www.census.gov/compendia/statab.

9. American Academy of Nurse Practitioners,“Frequently Asked Questions,” http://www.npfinder.com/faq.pdf; “Information about PAs andthe PA Profession,” http://www.aapa.org/geninfo1.html.

10. American Hospital Association, “2007 Chart-book” http://www.aha.org/aha/research-and-trends/chartbook/2007chartbook.html.

11. American College of Nurse Practitioners,“Nurse Practitioner Scope of Practice,” http://www.acnpweb.org/i4a/pages/index.cfm?pageid=3465.

12. TheDrug Enforcement Agency gives ScheduleII status to drugs under the following conditions:“a high potential for abuse . . . a currently accept-ed medical use in treatment in the United Statesor a currently accepted medical use with severerestrictions [and] abuse of the drug or other sub-stances may lead to severe psychological or physi-cal dependence.” 21 USC Sec. 812, http://www.usdoj.gov/dea/pubs/csa/812.htm.

13. University of California, San Francisco, Schoolof Nursing, “Masters Specialty Areas,” http://nurseweb.ucsf.edu/www/ix-ms.shtml.

14. American Academy of Physician Assistants,“Issue Briefs: PAs and Specialty Practice,” http://www.aapa.org/gandp/issuebrief/index.html.

15. Richard O. Nenstiel et al., “Allied Health andPhysician Assistants: A Progressive Partnership,”Journal of Allied Health 26 (1997): 133–35; Teresa M.O’ConnorandRoderickS.Hooker, “ExtendingRuraland Remote Medicine with a New Type of HealthWorker: Physician Assistants,” Australian Journal ofRuralHealth15 (2007): 346–51; Justine Strand,NancyM. Short, and Elizabeth G. Korb, “The Roles andSupply of Nurse-Midwives, Nurse Practitioners, andPhysician Assistants in North Carolina,” NorthCarolinaMedicalJournal68(2007):184–85;Peter J.Zed,PeterS.Loewen, andPeter J. Jewesson, “AResponse tothe ACP-ASIM Position Paper on Pharmacist Scopeof Practice,” American Journal of Health-System Pharm-

13


acy 59 (2002): 1453–57; Michael J. Dacey et al., “TheEffect of Rapid Response Team on Major ClinicalOutcome Measures in a Community Hospital,”Critical Care Medicine 35 (2007): 2076–82; R.TamaraKonetzka, William Spector, and M.Rhona Limcang-co,“ReducingHospitalizationsfromLong-TermCareSettings,”Medical Care Research and Review 2007. F. J.van den Biggelaar, P. J. Nelemans, and K. Flobbe,“Performance of Radiographers in MammogramInterpretation: A Systematic Review,” Breast, 2007;James D. Woodburn, Kevin L. Smith, and Glen D.Nelson, “Quality of Care in the Retail Health CareSetting UsingNational Clinical Guidelines for AcutePharyngitis,” American Journal of Medical Quality 22(2007): 457–62;Daisha J.Cipher,RoderickS.Hooker,and Patricia Guerra, “Prescribing Trends by NursePractitioners and Physician Assistants in the UnitedStates.” Journal of the American Academy of NursePractitioners 18 (2006): 291–96; Morton Kern, “Letterfrom the Editor: The Scope of Practice in the CathLab: Are There Limits as to What Cath Lab StaffShould Do?” Cath Lab Digest 14 (2006): 6–8; Leah S.Sansbury et al., “Physicians’ Use of NonphysicianHealthcare Providers for Colorectal Cancer Screen-ing,”American Journal of PreventiveMedicine 25 (2003):179–86; G. Wivell et al. “Can Radiographers ReadScreening Mammograms?” Clinical Radiology 58(2003): 63–67; Roderick S. Hooker and Linda F.McCaig, “Use of Physician Assistants and NursePractitioners in Primary Care, 1995–1999,” HealthAffairs 20 (2001): 231–38; Roderick.S. Hooker andLinda F. McCaig, “Emergency Department Uses ofPhysician Assistants and Nurse Practitioners: ANational Survey,” American Journal of EmergencyMedicine 14 (1996): 245–49; Gary M. Karlowicz andJennifer L. McMurray, “Comparison of NeonatalNurse Practitioners’ and Pediatric Residents’ Care ofExtremely Low-Birth-Weight Infants,” Archives ofPediatrics & Adolescent Medicine 154 (2000): 1123–26.For additional citations, see Shirley Svorny,“Physicians and Non-Physician Clinicians: WhereDoes Quality Assurance Come From?” in What CanStates Do to Reform Healthcare, ed. John Graham (SanFrancisco:PacificResearchInstitute,2006),pp.67–82.

16. Robert L. Phillips Jr. et al., “Can NursePractitioners andPhysiciansBeat Parochialism intoPlowshares?” Health Affairs 21 (2002): 133–42;Carolyn Rogers, “AAOS Now, June 2007: PhysicianAssistant ‘FAQs,’” American Academy of Ortho-paedic Surgeons, http://www.aaos.org/news/bulletin/jun07/managing2.asp.

17. Richard Allen, “Physician and NonphysicianLicensure and Scope of Practice,” Report of theCouncil onMedical Education, AmericanMedicalAssociation, CME Report 1-I-00, 2000, p. 5.

18. Clayton M. Christensen, Richard Bohmer, andJohn Kenagy, “Will Disruptive Innovations CureHealth Care?” Harvard Business Review On Point:

CuringU.S.Health Care, 3rd ed., September-October2000, p. 18.

19. Feldstein.

20. This paper uses the term “provider” to refer toany clinician, facility, or health plan directlyinvolved in delivering medical care. The terms“clinician” and “professional” refer to individualpractitioners.

21. TracyA.Klein, “Scopeof Practice and theNursePractitioner: Regulation, Competence, Expansionand Evolution,” Topics in Advanced Practice NursingeJournal 5 (2005), http://www.medscape.com/viewarticle/506277.

22. Dower, Christian, and O’Neil, p. 10.

23. American Academy of Physician Assistants,“Maintaining Professional Flexibility: The Caseagainst Accreditation of Postgraduate PhysicianAssistant Programs,” p.3, http://www.aapa.org/manual/03-MaintainProfession.pdf.


25. American Association of Colleges of Nursing,“AACN Position Statement on the PracticeDoctorate in Nursing,” http://www.aacn.nche.edu/DNP/DNPPositionStatement.htm.

26. Bricker & Eckler LLP, “Ohio’s New PhysicianAssistant Law,” Health Care Client Bulletin No.06-01, 2006, Columbus, Ohio, 2006.

27. Mickie S. Rops, “White Paper on OccupationalRegulation,” American Journal of Electroneurodiag-nostic Technology 44 (2004): 244–90.

28. “Say What? Can You Hear the Sound ofMoney?” Sacramento Bee, April 20, 2005.

29. Federation of State Medical Boards, “AssessingScope of Practice in Health Care Delivery: CriticalQuestions in Assuring Public Access and Safety,”http://www.fsmb.org/pdf/2005_grpol_scope_of_practice.pdf, p. 1.

30. Myrle Croasdale, “Nonphysicians BypassLegislatures, Use Own Boards to Expand Scope,”AMNews, Feb 12, 2007.

31. Ronald M. Davis, “From the President,” AMAeVoice, July 19, 2007.

32. Coalition for Patients’ Rights, http://www.patientsrightscoalition.org.

33. Ronald L. Scott, “Scope of Practice ReviewProcess,” University of Houston Health Law and

14


Policy Institute, Health Law Perspectives, April 21,2005.


35. See, for example, American Academy ofPediatrics Committee on Pediatric Workforce,“AmericanAcademyofPediatrics’ PolicyStatement,Scope of Practice Issues in the Delivery of PediatricHealth Care,” Pediatrics 111, no. 2 (2003): 426–35.

36. Nenstiel et al.

37. Federation of State Medical Boards, “AssessingScope of Practice in Health Care Delivery.”

38. Ronald L. Scott, “Optometrists Seek toExpand Scope of Practice Privileges.” Universityof Houston Health Law and Policy Institute,Health Law Perspectives, April 21, 2005.

39. Dower, Christian, and O’Neil, p. 10,.

40. American Society of Anesthesiologists, “TheScope of Practice of Nurse Anesthetists—January2004.”

41.DamonAdams, “AMAWantsDoctorOversightforDiagnosticTests,” AMNews,December 4, 2006.

42. Myrle Croasdale, “State Medical GroupsResist Naturopaths’ Licensure Push,” AMNews,March 27, 2006.

43. Myrle Croasdale, “Physicians Sue Missouriover Midwifery Law,” AMNews, August 13, 2007.

44. Myrle Croasdale, “California Expands OralSurgeons’ Scope of Practice,” AMNews, November6, 2006.

45. Myrle Croasdale, “Nonphysicians Bypass Legis-latures.”

46. Myrle Croasdale, “Texas Court Finds BoardExceeded Its Authority and Podiatrists’ Scope,”AMNews, May 5, 2008.

47. American Academy of Physician Assistants,“Where Physician Assistants Are Authorized toPrescribe,” http://www.aapa.org/gandp/rxchart.html.

48. “The Helping Healers; Physician AssistantsHave Become an Increasingly Common Health-care Option for TimesWhen There Isn’t a Doctorin the House,” New Orleans Times-Picayune,October 18, 2001, p. 1.

49. On the basis of a survey of medical boards,Bovbjerg et al. report median values for medical

board spending as 21 percent for credentialing, 49percent for investigation, and27percent for admin-istration. Randall R. Bovbjerg, Pablo Aliaga, andJosephine Gittler, “State Discipline of Physicians:Assessing State Medical Boards through CaseStudies.” Prepared for Office of Disability, Aging,and Long-term Care Policy, Office of the AssistantSecretary for Planning and Evaluation, U.S.Department of Health and Human Services,Contract #HHS-100-03-0011, February 2006.

50. American Nurse Credentialing Center, “Cer-tification,” http://www.nursecredentialing.org/cert/index.htm.

51. Bovbjerg, Aliaga and Gittler.

52. Eric G. Campbell et al., “Professionalism inMedicine: Results of a National Survey ofPhysicians,” Annals of Internal Medicine 147, no. 11(2007): 795–802.

53. LucianL.Leapeand JohnA.Fromson, “ProblemDoctors: Is There a System-Level Solution?” Journalof Medical Licensure and Discipline 93, no. 1 (2007):109. Notably, the Journal of Medical Licensure andDiscipline is a publication of the Federation of StateMedical Boards.

54. TimothyS. Jost et al., “Consumers,Complaints,and Professional Discipline: A Look at MedicalLicensure Boards,” Health Matrix: Journal of Law-Medicine 3, no. 1 (1993): 309–38.

55. Bovbjerg, Aliaga, and Gittler.

56. Gary M. Fournier and Melayne MorganMcInnes, “Medical Board Regulation of PhysicianLicensure: Is Excessive Malpractice Sanctioned?”Journal of Regulatory Economics 12, no. 2 (1997):113–26.

57. SethOldmixon, “TheGreatMedicalMalpracticeHoax: NPDB Data Continues to Show MedicalLiability System Produces Rational Outcomes,”Public Citizen’s Congress Watch, http://www.citizen.org/publications/release.cfm?ID=7497.

58. Bovbjerg, Aliaga, and Gittler.

59. Darren Grant and Kelly C. Alfred, “Sanctionsand Recidivism: An Evaluation of PhysicianDiscipline by State Medical Boards,” Journal ofHealth Politics, Policy and Law 32, no. 5 (2007):867–85; Don Colburn and Steve Woodward, “FewDoctors Lose Licenses forMissteps,”TheOregonian,April 19, 2005.

60. Grant and Alfred.

61. Lin, Rong-Gong II, “Lag Widens in Medical

15


Complaints; The State Board Now Takes anAverage of 2 ½ Years to Resolve Cases,” Los AngelesTimes, March 17, 2008.

62. Grant and Alfred.

63. Shirley Svorny, “Should We ReconsiderLicensing Physicians?” Contemporary Policy Issues[now Contemporary Economic Policy] 10 (1992):31–38; Shirley Svorny, “The Changing Role ofLicensure in Promoting Incentives for Quality inHealthCare,” inAmericanHealth Care: Government,Market Processes, and the Public Interest, ed. Roger D.Feldman (Oakland: Independent Institute, 2000).

64. ToddM.Ebersole, “EmergingTheories ofHMOLiability for Negligence of Its Network Providers,”Orange County Lawyer 41 (1991): 30–33; David L.Trueman, “Managed Care Liability: Current Issuesand Trends,” inHealth LawHandbook, ed. A. Goslin(Eagan, MN: West Publishers, 2006), pp. 111–74,191; Patricia M. Danzon, “Tort Liability: AMinefield forManagedCare?” Journal of Legal Studies26, no. S2 (1997): 491–519; William M. Sage,“Enterprise Liability and the Emerging ManagedHealth Care System,” Law and ContemporaryProblems 60, no. 2 (1997): 159–210.

65. Trueman.

66. Ebersole; Trueman.

67. Ibid.

68. Ibid.

69. Medical Liability Mutual Insurance Company,“Physicians and Surgeons—New York State:Premium Discounts,” http://www.mlmic.com/portal/UnderWritingPSNYS.aspx.

70. See Frank Sloan and Lindsay Chepke MedicalMalpractice (Cambridge, MA:MIT Press, 2008), pp.212–30; Derek A. Weycker and Gail A. Jensen,“Medical Malpractice among Physicians: WhoWill Be Sued and Who Will Pay?” Health CareManagement Science 3 (2000): 269–77. Sloan andChepke cite a 1985 survey by Schwartz andMendelson, that found most companies employsurcharges, but few physicians are subject to sur-charges, as malpractice claims are concentratedamong a small subset of physicians. William.B.Schwartz and Daniel N. Mendelson, “PhysiciansWho Have Lost Their Malpractice Insurance:Their Demographic Characteristics and theSurplus-Lines Companies that Insure Them,”JAMA 262 (1989): 1335–41.

71. U.S. General Accounting Office, “MedicalMalpractice Insurance: Multiple Factors HaveContributed to Increased Premium Rates,” GAO-

030702, June 2003, p. 38, http://www.gao.gov/new.items/d03702.pdf. The authors suggest thatphysician-owned companiesmayhave advantagesin underwriting, as they may have “intimateknowledge of local doctors and hospitals and thelegal customs and climate.”

72. William B. Schwartz and Daniel N. Mendel-son, “The Role of Physician-Owned InsuranceCompanies in the Detection and Deterrence ofNegligence,” Journal of the American MedicalAssociation 262 (1989): 1342–46.

73. Vermont Medical Malpractice Study Commis-sion, “Medical Malpractice Study Committee Meet-ing Minutes, January 26, 2005,” p. 3, http://www.bishca.state.vt.us/InsurDiv/medmal_studygroup/Jan26meeting/minutes_Jan26.pdf.

74. Milliman Consultants and Actuaries, “Item10: ‘Whether Any Efforts Have Been or Should BeUndertaken to Reduce the Incidents of MedicalMalpractice through the Underwriting Process”;Vermont Medical Malpractice Study Commis-sion, “Medical Malpractice Liability Insurance inVermont; A Report to the General Assembly,”Exhibit 61, pp. 70–84, http://www.bishca.state.vt.us/InsurDiv/medmal_studygroup/exhibits-secs/medmal_Section4.pdf.

75. State of California Department of Insurance,Application for Approval of Insurance Rates byProfessional Underwriters Liability InsuranceCompany (Doctors Company Insurance Group),Filing number 06-2574, Filed April 17, 2006.

76. Sloan and Lindsay, pp. 212–30.

77. Karen Edwards, “Texas Court Rules PodiatryScope of Practice Includes Ankle,” Podiatry Online,http://www.podiatryonline.com/main.cfm?pg=pro_development&fn=Texasdecision. Emphasisadded.

78. 45 CFR Subtitle A (10-1-06 Edition), Part 60(pages 140–47), http://www.npdb-hipdb.com/legislation/Final_Regulations_Title_IV.pdf. However,a 2000 report on the National Practitioner DataBank by the U.S. Government AccountabilityOffice found substantial underreporting. Mosttroubling to the report authors was underreport-ing of disciplinary actions (relative to malpracticesettlements or judgments). The authors note thatdisciplinary actions are better indicators of clini-cian competence and should be a primary focus ofdata-gathering efforts. The GAO also noted severeproblems related to data quality, problems withcompleteness, timeliness, and accuracy. Federalagencies themselves have ignored the requirementto report payment of malpractice claims in casesagainst government doctors. Officials decided not

16


to report cases in which they felt the care metappropriate standards, despite the legal require-ment to report. U.S. Government AccountabilityOffice, “National Practitioner Data Bank: MajorImprovements Are Needed to Enhance DataBank’s Reliability.” GAO-01-130, 2000; Daniel R.Levinson, “HHS Agencies’ Compliance with theNational Practitioner Data Bank MalpracticeReporting Policy,” Office of the Inspector General,U.S. Department of Health and Human Services,OEI-12-04-00310, 2005.

79. “An independent, not-for-profit organization,The Joint Commission accredits and certifiesmore than 15,000 health care organizations andprograms in the United States. Joint Commissionaccreditation and certification is recognizednationwide as a symbol of quality that reflects anorganization’s commitment to meeting certainperformance standards.” The Joint Commission,“About the Joint Commission,” http://www.joint-commission.org/AboutUs/.

80. Sage; Joint Commission, “Benefits of JointCommission Accreditation,” http://www.jointcommission.org/HTBAC/benefits_accreditation.htm.

81. For a discussion of competency validation, seeJane Alberico and Adrianne E. Avillion, CompetencyManagement for the Medical-Surgical Unit (Marble-head, MA: HC Pro, 2005) and other books pub-lished by HC Pro.

82. National Committee for Quality Assurance,“CRStandards andGuidelines: Credentialing andRecredentialing,” http://web.ncqa.org/tabid/407/Default.aspx.

83. National Committee for Quality Assurance,“CVO Certification Options,” http://web.ncqa.org/tabid/418/Default.aspx.

84. Federation of State Medical Boards, “FCVSBenefits,” http://www.fsmb.org/fcvs_benefits.html.

85. American Board of Medical Specialties,“American Board of Medical Specialties BoardCertification Editorial Background,” http://www.abms.org/news_and_events/media_newsroom/pdf/abms_editorialbackground.pdf.

86. Christine K. Cassel and Eric S. Holmboe,“Credentialing and Public Accountability: ACentral Role for Board Certification,” Journal of theAmericanMedical Association 295 (2006): 939–40.

87. Ann S. O’Malley, and Ann S. and James D.Reschovsky, “No Exodus: Physicians andManaged

Care Networks,” Center for Studying Health CareSystem Change Tracking Report no. 14, 2006,http://www.hschange.org/CONTENT/838/.

88. American Nurse Credentialing Center.

89. Nurse Practitioner Alternatives, Inc., “NPFAQs,” http://www.npedu.com/faq1.htm.

90. Randall G. Holcombe, “Does Licensing ofHealth Care Professionals Improve Health Care?”Journal of Medical Licensure and Discipline 93 (2007):13–19.

91. The Cleveland Clinic plays off of its reputationto offer remote second opinions: “MyConsult:Second Medical Opinions from Doctors at theCleveland Clinic,” http://www.eclevelandclinic.org/displayContent.jsp?productId=standard&document=document/productOverview.

92. Michael Howe, “Clinics a Key Part of HealthReform,”TheBostonGlobe, September10,2007;AnneM. Snowden et al., “MNCommunityMeasurement2007 Health Care Quality Report,” http://www.mnhealthcare.org/Resources/2006/FinalReport/2007%20Full%20Report.pdf. That report comparedMinnesota providers’ adherence to evidence-basedmedical guidelines. Minute Clinic performed aboveaverage for appropriate treatment for children withupper respiratory infection (86 percent compliance)and received the highest performance rating forappropriate testing for childrenwith sore throat (99percent compliance).

93.WalMartStores.com, “‘TheClinic atWal-Mart’to Open at Atlanta, Little Rock, and Dallas Supercenters,” http://walmartstores.com/FactsNews/NewsRoom/7922.aspx.

94. Mathew L. Lifflander, “Spitzer Has a Chanceto Cut Medical Errors, Save Lives.” Times Union,December 17, 2006; Lifflander is a lawyer andserved as director of the state Assembly’s MedicalPractice Task Force from 1977 to 1979.

95. Leape and Fromson.

96. Personal correspondence, July 29, 2006. Copyin author’s files. Dr. Amerongen is the author of“Physician Credentialing in a Consumer-CentricWorld,”Health Affairs 21, no. 5 (2002): 152–56.

97. Shirley Svorny, “Medical Licensing: Examiningthe Desirability of Existing Public Policy in theContext of Technological Change,” in The Half-Lifeof Policy Rationales: How New Technology Affects OldPolicy Issues, ed. Fred. E. Foldvary and Daniel B.Klein (NewYork:NewYorkUniversity Press, 2003).

17


STUDIES IN THE POLICY ANALYSIS SERIES

620. Markets vs. Monopolies in Education: A Global Review of the Evidenceby Andrew J. Coulson (September 10, 2008)

619. Executive Pay: Regulation vs. Market Competition by Ira T. Kay and StevenVan Putten (September 10, 2008)

618. The Fiscal Impact of a Large-Scale Education Tax Credit Program byAndrew J. Coulson with a Technical Appendix by Anca M. Cotet (July 1, 2008)

617. Roadmap to Gridlock: The Failure of Long-Range MetropolitanTransportation Planning by Randal O’Toole (May 27, 2008)

616. Dismal Science: The Shortcomings of U.S. School Choice Research andHow to Address Them by John Merrifield (April 16, 2008)

615. Does Rail Transit Save Energy or Reduce Greenhouse Gas Emissions? byRandal O’Toole (April 14, 2008)

614. Organ Sales and Moral Travails: Lessons from the Living Kidney VendorProgram in Iran by Benjamin E. Hippen (March 20, 2008)

613. The Grass Is Not Always Greener: A Look at National Health CareSystems Around the World by Michael Tanner (March 18, 2008)

612. Electronic Employment Eligibility Verification: Franz Kafka’s Solutionto Illegal Immigration by Jim Harper (March 5, 2008)

611. Parting with Illusions: Developing a Realistic Approach to Relationswith Russia by Nikolas Gvosdev (February 29, 2008)

610. Learning the Right Lessons from Iraq by Benjamin H. Friedman,Harvey M. Sapolsky, and Christopher Preble (February 13, 2008)

609. What to Do about Climate Change by Indur M. Goklany (February 5, 2008)

608. Cracks in the Foundation: NATO’s New Troubles by Stanley Kober(January 15, 2008)

607. The Connection between Wage Growth and Social Security’s FinancialCondition by Jagadeesh Gokhale (December 10, 2007)

606. The Planning Tax: The Case against Regional Growth-ManagementPlanning by Randal O’Toole (December 6, 2007)


605. The Public Education Tax Credit by Adam B. Schaeffer (December 5, 2007)

604. A Gift of Life Deserves Compensation: How to Increase Living KidneyDonation with Realistic Incentives by Arthur J. Matas (November 7, 2007)

603. What Can the United States Learn from the Nordic Model? by Daniel J.Mitchell (November 5, 2007)

602. Do You Know the Way to L.A.? San Jose Shows How to Turn an UrbanArea into Los Angeles in Three Stressful Decades by Randal O’Toole(October 17, 2007)

601. The Freedom to Spend Your Own Money on Medical Care: A CommonCasualty of Universal Coverage by Kent Masterson Brown (October 15,2007)

600. Taiwan’s Defense Budget: How Taipei’s Free Riding Risks War by JustinLogan and Ted Galen Carpenter (September 13, 2007)

599. End It, Don’t Mend It: What to Do with No Child Left Behind by NealMcCluskey and Andrew J. Coulson (September 5, 2007)

598. Don’t Increase Federal Gasoline Taxes—Abolish Them by Jerry Taylor andPeter Van Doren (August 7, 2007)

597. Medicaid’s Soaring Cost: Time to Step on the Brakes by JagadeeshGokhale (July 19, 2007)

596. Debunking Portland: The City That Doesn’t Work by Randal O’Toole(July 9, 2007)

595. The Massachusetts Health Plan: The Good, the Bad, and the Ugly byDavid A. Hyman (June 28, 2007)

594. The Myth of the Rational Voter: Why Democracies Choose Bad Policiesby Bryan Caplan (May 29, 2007)

593. Federal Aid to the States: Historical Cause of Government Growth andBureaucracy by Chris Edwards (May 22, 2007)

592. The Corporate Welfare State: How the Federal Government SubsidizesU.S. Businesses by Stephen Slivinski (May 14, 2007)

591. The Perfect Firestorm: Bringing Forest Service Wildfire Costs underControl by Randal O’Toole (April 30, 2007)


590. In Pursuit of Happiness Research: Is It Reliable? What Does It Imply forPolicy? by Will Wilkinson (April 11, 2007)

589. Energy Alarmism: The Myths That Make Americans Worry about Oil byEugene Gholz and Daryl G. Press (April 5, 2007)

588. Escaping the Trap: Why the United States Must Leave Iraq by Ted GalenCarpenter (February 14, 2007)

587. Why We Fight: How Public Schools Cause Social Conflict by NealMcCluskey (January 23, 2007)

586. Has U.S. Income Inequality Really Increased? by Alan Reynolds (January 8,2007)

585. The Cato Education Market Index by Andrew J. Coulson with advisersJames Gwartney, Neal McCluskey, John Merrifield, David Salisbury, andRichard Vedder (December 14, 2006)

584. Effective Counterterrorism and the Limited Role of Predictive DataMining by Jeff Jonas and Jim Harper (December 11, 2006)

583. The Bottom Line on Iran: The Costs and Benefits of Preventive Warversus Deterrence by Justin Logan (December 4, 2006)

582. Suicide Terrorism and Democracy: What We’ve Learned Since 9/11 byRobert A. Pape (November 1, 2006)

581. Fiscal Policy Report Card on America’s Governors: 2006 by StephenSlivinski (October 24, 2006)

580. The Libertarian Vote by David Boaz and David Kirby (October 18, 2006)

579. Giving Kids the Chaff: How to Find and Keep the Teachers We Needby Marie Gryphon (September 25, 2006)

578. Iran’s Nuclear Program: America’s Policy Options by Ted Galen Carpenter(September 20, 2006)

577. The American Way of War: Cultural Barriers to SuccessfulCounterinsurgency by Jeffrey Record (September 1, 2006)

576. Is the Sky Really Falling? A Review of Recent Global Warming ScareStories by Patrick J. Michaels (August 23, 2006)

355763_PA621:PaMaster.qxd 9/5/2008 1:16 PM

Untitled-2 2 2/7/06 4:35:00 PM

september 2013 - state attorney

Documents